More open, more IP protection

In recent years, China has placed unprecedented emphasis on the protection of intellectual property (IP) – partly driven by external pressure from foreign investors, but more importantly due to China’s own economy relying more on technology-intensive business. The judicial principle of IP protection has gradually shifted from after-the-fact relief to before-the-fact prevention. Burden of proof on the plaintiff has been lessened. Punishment on infringers has been raised to a crime-stopping level. China already has a network of IP courts and tribunals in key cities countrywide. At the start of 2019, the IP tribunal of the Supreme People’s Court was established in Beijing, which means adjudication of IP cases will be more unified and standardized in future.

The smart warrior looks at the most recent legal and judicial developments relating to IP protection in China, and also points out some blind spots that companies may have when doing business in China. Some market players, particularly foreign ones, still lack sufficient understanding of China’s IP protection system. For example, foreign companies influenced by the first-to-use principle in their home jurisdictions fail to actively and timely submit trademark applications in China. Also, many companies do not have a systematic and holistic IP strategy. The enhancement of IP protection is concurrent with China further opening the market to foreign investors. The promulgation of the Foreign Investment Law (FIL), which will take effect on 1 January 2020, is a legislative milestone marking a significant change in China’s regulatory approach towards foreign investment.